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Airlines quick to drop discounts

China Daily, July 18, 2011

Seeing a string of malfunctions and ensuing delays on the Beijing-Shanghai high-speed railway in the past week, domestic airlines stopped giving deep discounts and started charging higher prices for air tickets between the two cities over the weekend.

According to Ctrip.com, an online travel service, the cheapest price for flights from Beijing to Shanghai in the next four days are 720 yuan ($111) before the airport construction fee and the fuel surcharge. This amounts to 36 percent off the full ticket price of 1,130 yuan.

Most tickets are full price, and only a few have a 20 percent discount.

In comparison, the lowest price offered in the first week since the high-speed rail's opening on June 30 was only around 360 yuan, with many flights having sold for around 400 yuan to compete with the 300 km/h trains' second-class seat of 555 yuan.

Without warning, the price adjustment came right after three glitches on the high-speed rail line in four days from July 10 to 13. Passengers complained they were stranded in sweltering carriages for a couple of hours, with no compensation or extra services.

Although railway authorities quickly apologized and vowed on Saturday to improve the punctuality of the high-speed trains - calling it a priority in the summer travel season - many netizens still expressed disappointment at the high-speed rail service.

But the airlines' price rises have also aroused criticism.

Many netizens showed their scorn for the new pricing policy on Sunday, saying airlines were "looting a burning house" and taking advantage of passengers.

Mao Zhongxing, a netizen from Shanghai, said in his micro blog that business travelers should not go anywhere on days when thunderstorms are forecast, because neither trains nor planes are reliable.

"Joining in a video meeting is the best way to avoid trouble," he said.

In addition to the frequent malfunctions on the railway, the airlines suffered a smaller impact from high-speed railways than they expected.

China Eastern Airlines board secretary Luo Zhuping told China Business News that the number of passengers on its Beijing-Shanghai flights dropped by 18 percent in the first 10 days of July compared to the same period last year.

Previously, high-speed trains were expected to take away 20 to 30 percent of passengers from the airlines.

An insider said airlines had been worried because the new rail line opened at a time when flight delays were most serious because of frequent summer thunderstorms. In July 2010, only 32.6 percent of flights between Beijing and Shanghai took off on time, according to a report by Xinhua News Agency in May.

But high-speed trains seemed to have the same problem, as well as some teething problems.

Li Xiaojin, a professor at the Civil Aviation University of China, said: "Considering the losses airlines suffered at first, when the ticket price level dropped by 20 percent because of the high-speed rail, the airlines are now trying to recover some of the losses."

Li said the long-term impact will depend on the safety records of the Beijing-Shanghai high-speed rail line. "Safety is the key factor for travelers in choosing their transport means," he said.

China's top work safety supervisor on Sunday ordered cities and provinces along the Beijing-Shanghai high-speed railway to eliminate problems that could endanger traffic security along the line.

The Work Safety Commission of the State Council has required local authorities to carry out special campaigns to identify and solve problems.

The statement said the authorities should adopt long-term mechanisms such as setting up a map of areas along the line that are restricted to the public, conducting coordinated security inspections and exchanging information regularly.

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